Encore Capital Group (NASDAQ: ECPG) announced it has issued a redemption notice for all $230.0 million in outstanding 4.00% Convertible Senior Notes due 2029, with a redemption date set for September 24, 2026.

The redemption price will equal 100% of the principal amount of the notes plus accrued and unpaid interest through the redemption date, amounting to approximately $1,001 per $1,000 in principal. The company said its right to redeem the notes was triggered after its common stock price exceeded 130% of the conversion price on at least 20 trading days during the 30 consecutive trading days ending July 21, 2026.

Holders may convert their notes prior to 5:00 p.m. Eastern time on September 22, 2026. The standard conversion rate is 15.1763 shares per $1,000 in principal, equivalent to a conversion price of approximately $65.89 per share. Because the redemption notice constitutes a Make-Whole Fundamental Change under the indenture, the conversion rate is increased to 16.2056 shares per $1,000 in principal, or approximately $61.71 per share, for conversions made during the notice period. Any notes not converted by the deadline will be redeemed and canceled.

Any notes submitted for conversion after being called for redemption will be settled in cash.

In connection with the redemption, Encore said it expects to unwind and terminate capped call transactions it entered into with certain financial institutions in February 2023. Upon termination, the company would receive cash or shares reflecting the current option value of those transactions. Encore noted that the unwinding process may involve the option counterparties selling shares of the company's common stock in secondary market transactions, which could decrease the market price of its shares.

Truist Bank is serving as trustee, paying agent, and conversion agent under the indenture. The information is based on a press release issued by Encore Capital Group.